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Primark exposed as logistics firm flounders
Before people point fingers at Primark or any other retailers sourcing from Bangladesh ...one should take a closer look at Bangladesh’s Governments lack of ambition. With over 4000 factories and one of the country’s biggest foreign currency earners and employers...what has the Government done to protect, secure and create an environment for global retailers to be associated with the Country.
It is not global retailers who add pricing pressure- costings are very logical - majority of all raw materials are the same in any other part of the world. The only advantage is GSP and monthly salary cost- all other factors are virtually the same in any other part of the world.
In Bangladesh each factory requires a min of 16 certificates each from different government agencies to trade; the level of corruption involved to ‘buy’ these certificates is beyond belief; the level of bureaucracy created by agency staff if the factory owners do not provide ‘financial incentives is beyond understanding. There is not a single political member of the ruling party or the opposition who in some way or other does not have a vested interest in the garment Industry.
Let’s be clear on what is driving the real pressure on pricing ...one thing for sure it is not the global retailers; the pricing pressure is driven by Greed and Corruption at every stage;
• Greed: from factory owners (driving the latest high end four wheel drives and living lavish lifestyles) drain the business
• Corruption: merchandisers in sourcing offices who take anything from 5% to 10% commission form factory owners to placing orders.
• Corruption: customs departments for incoming raw materials to be released with the minimum amount of bureaucracy hindrances.
• Corruption: Sourcing office QC’s who charge 1 taka per piece they approve- if their demand is not met the goods go for continuous re-screening.
• Corruption: factory merchandisers who receive kick backs from polybag to carton suppliers for orders placed.
• Lack of respect for legislation: how many factories trade in buildings that have been condemned – inspectors paid to look the other way.
• Factory owners are forced to keep monthly salaries down to compensate for the corruption add ons.
What has the Bangladesh government done to support the industry?
• How many apparel parks have been created to support the industry?
• Why not one government agency to manage the compliance for factory set up?
• What infrastructure projects are in place to support the industry in the next 10 years?
• How can a country with Foreign Reserves in excess of $14bn- do nothing to support global retailers who have contributed to Bangladesh’s growth?
It is about time the Bangladesh Government takes responsibility and cleans up its act and stops accepting greed and corruption as a way of life; pointing fingers at the western retailers who work incredibility hard to support the country is not the solution.
One point to note- the bank on the ground floor sealed their offices as soon as they were informed of the cracks- staff were sent home...what other than greed and lack of responsibility for his work force did the owner force his workers to enter the building.
29 April 2013
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